Innovation, bank monitoring, and endogenous financial development

Article Abstract:

The interaction among capital accumulation, technological progress and financial development is analyzed. By using informational asymmetries to justify the endogenous emergence of financial intermediaries, a model of endogenous growth through new product development is suggested. While a positive correlation between growth and financial development is detected, the optimal degree of monitoring is shown to depend on factor prices and increases with capital accumulation. 'Banks' offer better insurance terms and gain a higher level of innovative activity through improved monitoring.

Administration of Urban Planning and Community and Rural Development, Economic Development NEC, Economic development, Financial intermediation

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The robustness and efficiency of monetary policy riles as guidelines for interest rate setting by the European Central Bank

Article Abstract:

The adoption of relatively simple monetary policy was deemed critical in maintaining favorable interest rates in Europe. Results derived from a stochastic analysis involving France, Italy, Germany and the UK, revealed that uncomplicated policy rules would create vast opportunities for the European Central Bank in maintaining interest rates from a critical threshold. The agency may also employ benchmarks rules with high and low coefficient options to address the economic structure differences of member countries.

Europe, Interest rates, Central banks, European Central Bank

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Money growth targeting by the Bundesbank

Article Abstract:

Variations in the monetary policy adopted by central bank administrators may be accounted for the path-dependent nature of fiscal strategies. Such may also explain the similarity of monetary policies employed by European countries, which share common experiences of policy failure. In Germany, the imposition of money growth targeting efforts did not only enable Bundesbank to regain control over national monetary matters, but also led to more stable prices.

Banking industry, Germany, Monetary policy, Deutsche Bundesbank

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